Escrow Part 4: What does my Escrow Review Statement tell me?

If you want to know more about your escrow account, your Escrow Review Statement is a great place to start. Escrow is an account you fund each month, which is used to make property tax and insurance payments on your behalf.

Since your tax and insurance amounts can change from year to year, we review your account at least once a year to adjust for any changes and then send you a statement in the mail each time. It has some really important information about changes to your account. I'll help you understand it. If you have your statement, follow along.

Near the top of your statement we tell you exactly what we found when we reviewed your account. This is where you'll see if you happen to have an overage or a shortage and whether your monthly payment will change or stay the same. The details about how these changes are determined are in the rest of the statement.

There are 4 parts to your statement.

Part 1 is all about your mortgage payment. Our estimates of your tax and insurance amounts can change with each review, and your required minimum balance can change too. These two things impact your payment and can cause an overage or shortage in your account.

If you have an overage, you'll likely see that your new payment amount is less than what you've been paying. And, you may even have have a refund check attached to the bottom of your statement.

If you have a shortage, you'll see two options for your new payment. One that spreads your shortage over the next 12 months and one that lets you pay your shortage in full.

You'll also see a note at the bottom of this section. If you use a third party service to make your payment, this will show that you need to update the payment amount yourself. If your payment is withdrawn by us, this will show that we'll update the amount for you.

Part 2 is a detailed explanation of how we calculated your new payment amount and how it compares to what you've paid in the past. If you have an overage or a shortage, the details about how we calculated that amount will be here too. With a shortage, you'll see how choosing to pay it over time adds to your monthly escrow amount.

The next section will give you even more information about how we calculate overages and shortages.

Part 3 is a projection for the next 12 months. We look at how much money will be going in and out of your account, and the balance you'll have each month. Your lowest projected balance will be highlighted. If it's more than the balance needed in your account that month, the difference is the overage. If it's less, the difference is the shortage.

And finally, Part 4 of your statement shows your escrow account history. Here we give you the details about the property tax and insurance payments we made from your account since your last escrow review.

Ok, that's your statement! Just remember this statement only shows you how changes to your escrow amount affect your monthly payment. If you have any questions about your statement or your payment changing for another reason, we're here for you. Give us a call at 1-800-340-0473 or learn more about your mortgage by watching our other videos.